>> now we follow the money and take you inside the vatican's financial empire. >> when it comes to money, this is one of the sloppiest organizations on earth... >> al jazeera america presents... holy money only on al jazeera america . >> they are the emerging world powers and they're combining their economic hats. the bricks alliance hopes to challenge the western dominated world bank and international monetary fund. it's the inside story. >> hello, i'm a he libby casey. brazil, russia, india and china

and south africa today they make up a fifth of the world gdp, and they're working together. they're launching their own development and rainy day fund. it's a major shift in the western-led status quo. they say they'll be responsive to the needs of developing economies but can they overcome their stark differences to work together and what does it mean for the united states and their sometimes confine shoes relationships with thes contentious elationships with these nation nations. >> the historic dimension of our summit can be demonstrated by the importance of the agreements we sign. >> head quartered in shanghai, they have a commitment of $100 billion.

and it's capital will be divided among the five members the first president will be from india. the board of directors will be led by brazil and the africa region lending branch will be based in south africa. >> the bricks bank will be one of the biggest financial agencies in the world. >> bricks nations see their bank as counter to what they view as western-dominated financial order and a means to provide security investment and growth resources to themselves and other emerging nations. the countries have long argued for more of a say in the global system. they chafed a the way had a lenders at the world bank and international monetary fund or imf put restrictions on the countries they help. after feeling they have not been heard bricks say its time for change. >> we'll put pressure for reform. unless they reform and takes bricks nations into account

more, i think this constitutio institution will be more dominant in the bricks countries. >> reporter: the world bank acts as a world provider for developing countries. it's twin goals is to end poverty and promote prosperity. established after world war ii the imf said its fundamental mission is to insure stability in the global system. it lends to countries with pavement difficulties, but imf loans are not free money and their help comes with strings. take ukraine. the agency approved a $17 billion package in april, but on the condition that the kiev government follow strict economic reforms like raising taxes and energy prices. bricks advocates say they will be different, but some economists are skeptical of its ability to compete in an already established arena. >> they are not ready. they are risking a lot. they're risking the progress they have in the last ten years for a project that will not render the benefits they think

they will have. >> the bank is looking to provide loans for infrastructure and development projects building up other emerging economies. officials say it could be two years before it starts lending. and there's the possibility that other countries such as turkey, mexico, and indonesia could join later. >> we should push forward with our cooperation and establish the contingency reserve arrangement as soon as possible. >> 42% of the world's population live in the bricks nations today making up 20% of the world's gd p it' gdp. it's a major moment. they all have huge economic potential. at the same time bricks nations have unique and varying interests that are often at odds with washington. >> a new player in the global

aid scene, what impact will it have and dna issues spurred its creation and where does it put its efforts o on the world stage? here to talk about it from our washington studios our guests. professor, we'll start with you. why are these countries striking out on their own? >> well, for a long time these countries have deserved a greater voice at the imf in the world bank. those institutions claim to give voter rights according to the presence of the size of the economy in the world. china is currently ranked sixth

in voting strength at the imf. but we know that it's economic presence in the world ranks second and soon may surpass the size of the united states. it's been a long time that we should reform the votes at the imf and the world bank, and these countries didn't get what they were supposed to a long time ago. >> and take us back into the history. how has this not reached adequacy from these countries. we received assurances from christine la guard as she was ankling to become head of the imf for these emerging economies, how have we gotten here? >> it's taken a long time for the shares and the seats and the counts that would be give out. primarily the european countries have been reluctant to do so. but most recently it has been the united states congress that

has not approved of the reform that were agreed in 2010. this is a direct protest against the united states rather than the european. >> how do you see theocracy of the world bank and imf with what bricks is doing? >> the new development bank, as they call it, it's pretty much a parallel to the world bank. but we also have four regional development banks and the china development bank far has given . in this area there are lots of banks, and it's nice to have one more. it's not dramatic. while there arrangement is not really a competitor. it's supposed to be $1 billion. you don't know how they can be available.

you don't know how it can be activated. and the u.s. on its own put up hundred billion dollars in credit swaps to western countries, not for the bricks countries. you can't say that this is comparatively small by that comparison, it's nothing what the imf does in its programs. >> let's bring you in on the conversation, what do you see as the major motivation for these countries striking out on their own and forming a world bank, a lending agency, and also an imf, sort of a protective rainy day fund? >> i think there are at least two first run related to the fact that they're ending now the first cycle of brick summit that was started in 2009. and it was a pressure to deliver

something concrete . the second die mention i dimension relates to the reform of the financial institution. as we discussed already, bricks as a group was created in 2008 for these reforms. so far nothing has happened besides promises that wasn't realized in real life. so the second dimensions related to the pressure over the international financial institutions in order to make strong this claim for reforms.

but i do think there is a third dimension that should not be neglected, which is related to the fact that these institutions, at least the new development bank, as it is called, will offer an alternative for developing countries in terms of financing infrastructure projects, energy projects and other projects in the developing world. they would not follow the world banks guidelines. >> let's pick up on something that we heard from paolo estevez estevez. it was form back in 2009. south africa was not part of it then. they are now. how important is it to say that

they'll start lending money b by 2016. >> it's important to say that they did something. if they didn't decide this they wouldn't have any institution . they have been discussing these two things for five years now. so they need to get it done otherwise it would just look like clients. we have many such clients. we have g-7, previously g- 8. >> does a new development bank threaten the power structure? >> it does not threaten them yet

yet. there is a fund called the chang mai initiative. >> no one has borrowed from it. >> all the political problems that the imf faces are going to be faced by these other banks as well. the chang mai initiative could not come to an agreement with their loans. so what did they do? they said if you want to borrow from chang mai, you have to adhere to the imf. and they have passed it to the imf. the bricks have started out with an interesting plan. all members are equal. they each give $10 billion. they get equal vote shares but

they're not really equal, right? china's economy is two orders of magnitude larger--not quite yet but soon will be two orders magnitude larger than south africa. these are not equal partners, and at some point china will have to take the lead for the bank to be effective. >> we'll come back and talk about the agenda of these countries, like brazil, russia and china and how they may differ. you're watching "inside story."

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>> china gets the opportunity to play a multilateral role. the question is if it's able to do so. then you look at the three others. for south africa it may be nice to be in a big group. it's not held in good regard. brazil and india - very few interests in common are russia and china. >> take us there - how will the countries benefit from the collaborative effort? >> i do think that every single country benefits from being at the brics.

just to give you an example - we have to remember that the brics as a group was launched in 2009, one year after the russian intervention in georgia. and it was a clear sign of the dissatisfaction of the russians regarding the international order, and regarding the presence of n.a.t.o. or the e.u. at what they considered still being their zone of influence. brazil and south africa probably benefits from being a bric country. for all the lifestyle that the brics project over the east countries. in china, take the brics as a

way to lose a little bit, its own footprint in the international system. so i do think that these countries have reasons to stay together. every one of them. it is a complete different story to think about a development bank. there are some questions that are still not answered. if we think about the kind of projects that this bank will fund, let's think about infrastructure projects, for instance. what would be the causes related to environment, human rights, to gender rights, and so on and so forth. when we start to discuss these things, we are going to see that every country has its own take on the development model. it will be really difficult for these countries to come together with the - with a common view

about what development means. they did launch a new development bank, but they are - we don't know yet what they understand by development. >> is it significant that they have gotten this far. there were debates if they could agree on a currency, if they get table. >> exactly. that is the main thing. they have made decisions and they have two institutions and therefore they know about the brics that could stay. >> we'll take a break, when we continue the conversation we'll talk about the brick development bank, and how could other emerging economies benefit from it. this is "inside story", stay with us.

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>> in is al jazeera america live from new york city, i'm thomas drayton. in gaza the death toll climbs as the israeli military presses its battle with hamas. outrage in ukraine over the handling of the passengers in malaysia airlines flight mh17. people around the world mourn the loss of friends and family members. >> armstrong is on the moon. >> remembering "apollo